Will Netflix kill cable? Or is it the other way around?
The Internet鈥檚 march toward media domination continues, and Netflix seems to be leading the way.
The streaming-TV service now accounts for 36.5 percent of the total bandwidth consumed by North American users during peak traffic periods, up nearly two percent since November, according to by Canada-based network company Sandvine.
The report reflects a trend that has become clear in the last few years: Demand for Netflix, and online video in general, is growing at an incredible pace.
How that will shape the content service industry remains a big unknown. Does the growth of Netflix and its ilk herald the death of cable TV, as consumers cut the cord in favor of streaming services? Or does it strengthen broadband providers 鈥� many of them cable companies 鈥� as online video services increasingly rely on fast, high-quality Internet?
鈥淣etflix no longer takes up just a third of Internet traffic anymore. Now it's edging closer to two-fifths,鈥� tech reporter Brian Fung for The Washington Post.
Together, Netflix and YouTube already account for more than half all bandwidth consumed in North America, based on the Sandvine study. By 2019, video could represent up to 80 percent of the world鈥檚 Internet traffic consumption, according to tech giant Cisco鈥檚 on the future of the web.
鈥淚t would take an individual over 5 million years to watch the amount of video that will cross global IP networks each month in 2019,鈥� the report predicted.
Or, as Mr. Fung , 鈥淰ideo is eating the Web.鈥�
Less certain is who comes out on top as a result.
Yes, online video and streaming services are gaining serious ground. Netflix saw in the last quarter of 2014, bringing its total subscriber base to more than 57 million worldwide. About 聽now have access to subscription video on-demand (SVOD), according to Nielsen鈥檚 Total Audience Report, released in March.
Meanwhile, pay-TV providers in 2014, up from 95,000 in 2013, according to New Hampshire-based media firm Leichtman Research Group. Live television watching was also on the decline, especially among younger audiences. In 2014, US adults spent, on average, just under 5 hours a day watching live TV, down 13 minutes from the year before, the Nielsen report found.
Still, that may not mean it鈥檚 the end of the line for cable companies.
Though more households now have SVOD access, more than 90 percent of those that have SVOD, broadband, and cable are more likely to hang on to cable than the first two, according to Nielsen.
More significant, perhaps, is the growing pressure on online video services to stream more quickly and reliably. More users streaming more content puts a greater burden on Internet infrastructure, and can slow down services.
Last year, Netflix cut controversial deals, first with Comcast, and then with the next three largest American broadband Internet service providers, in which Netflix would pay for faster, more reliable streaming to their subscribers.
鈥淭he [Netflix-Comcast] accord is the latest sign that broadband providers are gaining leverage with content companies,鈥� .
It remains unclear who will ultimately benefit the most from this tug-of-war. But one thing is for sure: 鈥淥nline video has already shaped the course of corporate history, and now it's about to define the future, too,鈥� Fung wrote.
